SRG Housing Finance Q4 FY26 earnings call
In brief
SRG Housing Finance Q4 FY26: AUM ₹1,042 cr (+37%), PAT ₹9 cr (+50%); guides ₹1,300-1,500 cr AUM and ₹600 cr disbursements for FY27.
- Management's tone
- Confident
- What was said
- Leaned positive
- Guidance
- Guidance raised
- Analyst pushback
- Medium
- Stock, next session
- −8.08% (Nifty 50 −1.83%)
- AUM crossed the ₹1,000 cr milestone at ₹1,042 cr in FY26, up 37% YoY, on disbursement growth of 45% YoY to ₹443.54 cr.
- FY27 targets: AUM ₹1,300-1,500 cr and disbursements ~₹600 cr; expansion into Tamil Nadu and Telangana with 10-15 new branches by year-end.
- Q4 FY26 NII was ₹28 cr (+33% YoY) and PAT ₹9 cr (+50% YoY); full-year PAT ₹32.49 cr (+33% YoY) with NIM at 10.91%.
- Acuité upgraded long-term credit rating to A- Stable; management said funding access expanded via new bank lines, NCDs and equity market.
- Asset quality stable: GNPA 1.77% (vs 1.84%), NNPA 0.65%, capital adequacy 38.62%; average ticket size rose 41% YoY to ₹15.44 lakh.
An AI read of the company's transcript · the filing
The numbers
The quarter, Q4 FY26
| This quarter | A year ago | Last quarter | Margin | |
|---|---|---|---|---|
| Revenue | ₹57.2 cr | +33.9% | +13.5% | |
| Profit before tax | ₹11.6 cr | +51.1% | +11.6% | 20.3% (18% a year ago) |
| Net profit | ₹9.3 cr | +49.4% | +12.7% | 16.2% (14.5% a year ago) |
| EPS (₹) | ₹5.89 | +33.0% | +12.6% |
From the company's filed results for the quarter ended 31 Mar 2026 (standalone), not from the call.
Where management's figures differ from the filing
- Q4 revenue (NII) vs total revenue: said NII ₹28 cr (+33% YoY); filed Revenue ₹57.24 cr (+33.9% YoY). Management discussed NII, a sub-component of total revenue which includes other income; growth rates are similar.
What moved the numbers, as management explained it
- AUM growth of 37% YoY to ₹1,042 cr driven by disbursement growth of 45% YoY to ₹443.54 cr on healthy demand across operating geographies.
- Q4 NII growth of 33% YoY to ₹28 cr supported by AUM expansion and improving funding efficiencies; full-year NIM at 10.91%.
- Average ticket size rose 41% YoY to ₹15.44 lakh on higher property/construction costs and customer aspirations; LTV held at ~50.7%.
- Cost of borrowing improved to 10.88% from 11.07% YoY; cost-to-income ratio declined to 63.14% from 67.49% on operating leverage.
- Asset quality stable with GNPA at 1.77% (vs 1.84%); cheque bounce rate 14-15% with ~90% recovered in the same month; 97% EMI collections via banking channels.
The numbers management led with
- AUM: INR 1,042 crore as of FY26 (+37% YoY)
- Disbursements FY27 (target): INR 600 crore (guidance raised from INR 500 crore)
- Capital adequacy: 38.62%
Guidance
Guidance on this call
| What | For | What management said |
|---|---|---|
| FY27 disbursement target | FY27 | FY27 disbursement target of approximately ₹600 cr. |
| FY27 AUM target | FY27 | FY27 AUM targeted at ₹1,300-1,500 cr. |
| Sustainable NIM | — | Sustainable NIM around 11%. |
| ROE 1-2 years | — | ROE expected at 12-13% over 1-2 years. |
| Cost of borrowing 1-2 years | — | Cost of borrowing to decline from 10.88% to around 10.70% over 1-2 years. |
| AUM target 2-3 years | — | AUM of ₹2,000-2,500 cr in the next 2-3 years. |
| Long-term AUM vision | — | Long-term AUM vision of ₹10,000-20,000 cr. |
| Tamil Nadu and Telangana presence | FY27 | To be present in Tamil Nadu and Telangana with 10-15 new branches by end of FY27. |
The business
By business
Affordable housing finance (rural and semi-urban)
Crossed ₹1,000 cr AUM milestone in FY26 at ₹1,042 cr (+37% YoY). Q4 NII ₹28 cr (+33% YoY), PAT ₹9 cr (+50% YoY); 96 branches across 6 states and 1 UT; ~94% rural/semi-urban book, 79% self-employed customers.
AUM ₹1,042 cr (+37% YoY) · Disbursements FY26 ₹443.54 cr (+45% YoY) · Q4 NII ₹28 cr (+33% YoY) · Q4 PAT ₹9 cr (+50% YoY) · FY26 PAT ₹32.49 cr (+33% YoY) · FY26 NIM 10.91% · GNPA 1.77% · NNPA 0.65% · Capital adequacy 38.62% · Cost of borrowing 10.88% (Q4 FY26) · Cost-to-income 63.14% (Q4 FY26) · Average ticket size ₹15.44 lakh (+41% YoY) · Average LTV 50.7%
Outlook: FY27 AUM targeted at ₹1,300-1,500 cr on ₹600 cr disbursements; 10-15 new branches in Tamil Nadu and Telangana by year-end; long-term vision ₹10,000-20,000 cr AUM.
Balance sheet, capex and funding
- Capital adequacy at 38.62% in FY26, providing headroom for growth; well above regulatory requirement.
- Cost of borrowing at 10.88% in Q4 FY26, down from 11.07% in Q4 FY25 on liability profile strengthening.
- Funding supported by 36 lenders and NCD investors including SBI, HDFC Bank and LIC Housing Finance; mutual funds also invested in NCDs.
- NHB allows up to 12x leverage but banks typically restrict to 5-6x; equity raise may be considered in Q4 FY27 or Q1-Q2 FY28 once leverage crosses 5-6x.
The industry, as management sees it
Management sees strong growth opportunity in affordable housing for underserved rural/semi-urban self-employed segments. Industry-wide trend of rising construction costs and property prices is increasing ticket sizes. Government development in semi-urban/rural areas and rising industrial activity are supporting demand. UPI and digital payment adoption even in rural areas is reducing cash dependency.
Risks management named
- Cheque bounce rate of 14–15% in initial collection cycle, though 90% recovered within same month
- Rajasthan and Gujarat together constitute 77% of AUM creating geographic concentration risk
- Stage-2 assets at 5.18% require monitoring as expansion moves into newer geographies
Q&A
Q&A session was active with 8 analysts participating. Key themes included: (1) AUM guidance raised to INR 1,400–1,500 crore for FY27 with disbursement target of INR 600 crore; (2) geographic expansion into Tamil Nadu and Telangana with 10–15 new branches; (3) asset quality monitoring with GNPA at 1.77% and explanation of Stage-1/Stage-2 bucket dynamics; (4) competitive positioning vs. large HFCs; (5) underwriting differentiation for self-employed rural borrowers. Management demonstrated confidence on growth targets and funding access post rating upgrade. No significant pushback on guidance; analysts were largely satisfied with responses.
Asked for a number, answered without one
- ROE target trajectory: Initially said 'around 18%' then revised to '12% to 13%'; no quantification of timing or drivers behind the change.
- Equity raise amount: Confirmed well-capitalized; said equity raise may be considered in Q4 FY27 or Q1-Q2 FY28 if leverage crosses 5-6x; no amount specified.
Every question, with its answer
1. Branch expansion & AUM guidance
Ronak Chheda, Awriga Capital
Question. Qualitative update on new branches scale-up in Maharashtra, Andhra Pradesh, Karnataka over next 12 months; and whether INR 500 crore disbursement guidance still holds and expected AUM growth for next 12 months
Answer, Archis Jain, CEO. Last 1.5 years expanded into Maharashtra, Andhra Pradesh, Karnataka; focusing on increasing branches in those states and also expanding into Tamil Nadu and Telangana with ~10–15 new branches by end of FY27. Disbursement target for FY27 is INR 600 crore (raised from INR 500 crore). AUM expected at INR 1,400–1,500 crore with optimism to reach INR 1,500 crore.
Follow-up. So that would lead to AUM of around INR 1,500 crore?
Answer. Will be around INR 1,300–1,400 crore but optimistic to target INR 1,500 crore.
2. Cost of borrowing
Ronak Chheda, Awriga Capital
Question. Cost of borrowing trajectory over next two years given rating upgrade to A-
Answer, Archis Jain, CEO. Cost of borrowing will come down. In expansion mode with new state entry and team recruitments, cannot guarantee specific numbers. Over next 1–2 years, cost to income will come down from 63% to 61%; corrected to cost of borrowing declining from 10.88% to ~10.70%.
Partly answered.
3. ROE trajectory
Ankur Kumar, Alpha Capital
Question. What ROE levels are expected in coming 1–2 years given high geographic expansion and AUM targets
Answer, Archis Jain, CEO. Currently managing same ROI level; with housing market trajectory, ROE expected at ~18%. When pressed on current 12–13% ROE, confirmed parallel path to reach 12–13%.
Follow-up. Currently ROE is 12–13%, right?
Answer. Confirmed ROE will be around 12–13%.
4. Asset quality & macro risks
Ankur Kumar, Alpha Capital
Question. Given geopolitical situation and below-normal monsoon, any concerns on book quality?
Answer, Archis Jain, CEO. Not impacting significantly. Diversified book profile with different credit and customer profiles. No challenge seen on asset quality.
5. Regional asset quality
Rohitash Arora, Individual Investor
Question. Reason for high GNPA in Rajasthan region specifically
Answer, Archis Jain, CEO. No particular reason. Rajasthan portfolio is largest compared to other states, so absolute NPA appears higher. No concerning factors impacting the portfolio.
Follow-up. With increasing average ticket size, customers may get lower interest rates from competitors. Is high competition affecting SRG?
Answer. Not really. Customer profile and income source remain the same. Ticket size increase is due to rising construction costs and changing aspirations in rural/semi-urban areas, not customer profile shift.
6. Geographic diversification
Danish Shah, Individual Investor
Question. Rajasthan and Gujarat contribute 77% of AUM; how is management planning to diversify geographically over time
Answer, Archis Jain, CEO. Started in Rajasthan then Gujarat hence dominance. Southern states (Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, Telangana) have grown fastest in last 1.5 years, outpacing Gujarat and Rajasthan. Expansion plan focused on southern states; expect Rajasthan and Gujarat share to reduce in 2–3 years.
Follow-up. Key challenges in scaling deeper into rural geographies while maintaining asset quality and operational efficiency?
Answer. Main challenge is customer service — speed of loan delivery and service quality. Implementing platform changes, ERP transformation, and full digital shift to address this.
7. Average ticket size drivers
Danish Shah, Individual Investor
Question. How much of the average ticket size increase is driven by high property prices vs. strategic shift in customer profile
Answer, Archis Jain, CEO. Primarily due to increased construction costs and customer aspirations for better homes. Customer profile remains the same — not shifting to urban profiles. Government development in semi-urban/rural areas and rising industrial activity are driving property prices. Aspirations for proper houses with amenities have increased in rural areas.
8. AUM guidance & asset quality
Parag, PH Financials
Question. AUM guidance for next 2–3 years and whether capitalization is sufficient for that growth; and understanding Stage-1 collection mechanism given 93% Stage-1 assets
Answer, Vinod Kumar Jain, Managing Director. FY27 disbursements ~INR 600 crore; AUM likely INR 1,400–1,500 crore. Rating upgrade opened banking channels, equity markets, and NCD market; no funding challenges anticipated. Under NHB guidelines leverage up to 12x possible but banks allow 5x–6x; equity raise planned in Q4 FY27 or Q1-Q2 FY28 once leverage approaches threshold. On collections: 97% via banking channels; initial cheque bounce ~14–15%; 90% of bounced cheques recovered within same month through 5–7 day follow-up calls. Stage-1 at 93.05% reflects X-bucket movement resolved within 30 days; Stage-2 at 5.18% (30–60 days) before moving to NPA.
9. Macro risk & self-employed borrowers
Tushar, Individual Investor
Question. How is ongoing macro uncertainty (West Asia crisis, monsoon) impacting self-employed borrowers and repayment trends given 75%+ book is self-employed
Answer, Archis Jain, CEO. Macro impacts large businesses and government-linked entities. Self-employed segments (Kirana stores, contractors, dairy, spare parts) have small-scale operations not materially affected. Conservative LTVs and FOIAs help maintain risk profile. No trouble seen on repayment front.
Follow-up. How is SRG's underwriting approach different from large affordable housing finance players?
Answer. 25+ years of expertise in assessing self-employed profiles. Proprietary templates and databases built over decades. On-ground assessment: credit team visits customer location, stays with them to understand cash flows, expenses, vendor relationships. No reliance on formal documentation (GST, ITR, Udyam, banking history) as customers lack these. Focus on end-use of funds.
10. Digital collections
Tushar, Individual Investor
Question. Split of collections between cash and digital given 100% digital push
Answer, Archis Jain, CEO. Cash collection not more than 4–5%. UPI adoption prevalent even in semi-urban and rural areas now.
11. NIM sustainability
Brendon, Individual Investor
Question. NIMs stable at ~11% despite rapid growth; what are sustainable NIM levels?
Answer, Archis Jain, CEO. Somewhere around 11% is sustainable.
Follow-up. Average LTV increased from 46.6% to 50.7% YoY; is this a strategic shift or risk concern?
Answer. Not a strategy or risk concern. Driven by nature of housing finance product — LTVs naturally moved from 46–47% to 50%+ as market evolved.
12. Technology initiatives
Jai Jain, Individual Investor
Question. Details on SRG SRAJAN technology initiative: business benefits achieved and cost of developing/maintaining the app
Answer, Archis Jain, CEO. Own ERP system continuously under development. Introduced AI into calling. Still in development phase — requires research on TAT reduction and operational efficiency improvement. No significant cost incurred yet; IT team expanded.
Follow-up. Long-term AUM target over 3–5 years and competitive positioning vs. players like Aptus (INR 13,000 crore AUM)?
Answer. In next 2 years target to cross INR 2,000 crore; 2.5–3 years target INR 2,000–2,500 crore with branch productivity of INR 25 crore per branch. Long-term vision INR 10,000–20,000 crore AUM; clarity on timeline expected in next 2 years. Second generation leadership in place for long-term continuity.
Partly answered.
What was said
Topic by topic, in the order it was spoken
Company Overview & Positioning · Vinod Kumar Jain (MD)
- SRG is the first housing finance company of Rajasthan, focused on rural and semi-urban underserved self-employed segments
- Present in 6 states and 1 union territory; 96 branches; 980+ employees; 36 lenders including SBI, HDFC Bank, LIC Housing Finance
- 94% of loan book from rural/semi-urban markets; 79% customers are self-employed
- AUM grew from INR 26 crore in FY14 to INR 1,042 crore in FY26; PAT grew from INR 1.2 crore to INR 32.5 crore
- 97% of EMI collections via banking channels; strong technology and banking integration
- Two major milestones: crossed INR 1,000 crore AUM and received A- Stable rating upgrade from Acuité
Q4 & FY26 Financial Performance · Archis Jain (CEO)
- Q4 FY26: Net interest income INR 28 crore (+33% YoY); NIM at 11.28%; PAT INR 9 crore (+50% YoY)
- FY26: Net interest income INR 98.26 crore (+31% YoY); NIM at 10.91%; PAT INR 32.49 crore (+33% YoY)
- AUM at INR 1,042 crore (+37% YoY); disbursements grew 45% YoY to INR 443.54 crore
- Average ticket size increased 41% YoY to INR 15.44 lakh; average LTV maintained at 50.7%
- GNPA improved to 1.77% (from 1.84%); NNPA at 0.65%; capital adequacy at 38.62%
- Cost of borrowing improved to 10.88% (from 11.07% YoY); cost-to-income declined to 63.14% (from 67.49%)
Branch & Operational Metrics · Archis Jain (CEO)
- AUM per branch increased to INR 10.86 crore in Q4 FY26 from INR 8.44 crore in Q4 FY25
- AUM per employee improved to INR 1.05 crore from INR 0.88 crore YoY
- Average ticket size increased 41% YoY to INR 15.44 lakh driven by newer markets and higher construction costs
- Underwriting discipline maintained with average LTV at ~50.7%
Geographic Expansion Strategy · Archis Jain (CEO)
- Last 1.5 years expanded into Maharashtra, Andhra Pradesh, Karnataka; fastest growing regions
- Planning expansion into Tamil Nadu and Telangana by end of FY27 with ~10–15 new branches
- Not expanding in existing states (Gujarat, Rajasthan, MP) currently; focusing on southern region
- Target: AUM per branch to reach INR 25 crore (from INR 10.86 crore currently)
Funding & Capital Position · Vinod Kumar Jain (MD)
- Rating upgrade to A- Stable opened multiple funding avenues: new bank channels, equity market access, strengthened NCD market
- Capital adequacy at 38.62% providing sufficient headroom for growth
- Under NHB guidelines can leverage up to 12x; in practice banks allow up to 5x–6x
- Equity raise planned in Q4 FY27 or Q1–Q2 FY28 once leverage approaches 5x–6x threshold
Underwriting & Credit Assessment · Archis Jain (CEO)
- 25+ years of expertise in assessing self-employed rural profiles using proprietary templates and databases
- Credit team visits customer location to assess cash flows, business operations, vendor relationships
- No reliance on formal documentation (GST, ITR, Udyam, banking history) for these customers
- Conservative LTVs and FOIAs maintained; self-employed profiles (Kirana, contractors, dairy, spare parts) remain resilient to macro shocks
Collection Mechanism & Asset Quality · Vinod Kumar Jain (MD)
- 97% of collections via banking channels; cash collections <5% due to UPI adoption even in semi-urban/rural areas
- Initial cheque bounce rate ~14–15%; 90% recovered within same month through follow-up calls
- Stage-1 assets at 93.05%; Stage-2 at 5.18%; Stage-3 (NPA) at 1.77%
- X-bucket movement resolved within 30 days; penal interest and cheque bounce charges applied for delays
Long-Term Vision & Aspirations · Vinod Kumar Jain (MD)
- Next 2 years: target to cross INR 2,000 crore AUM
- 2.5–3 years: targeting INR 2,000–2,500 crore AUM with branch productivity of INR 25 crore per branch
- Long-term vision: INR 10,000–20,000 crore AUM; clarity on timeline expected in next 2 years
- Second generation leadership in place for long-term continuity
In their words
Our AUM was INR 26 crore in FY'14, which has increased to INR 1,042 crore in FY'26. In this period, our profit after tax has increased from INR 1.2 crore to INR 32.5 crore.
If our branch makes around INR 25 crore, then our target for the branch is around INR 110 crores. So, we should have a book of INR 2,000 crore, INR 2,500 crore within the next two and a half years, three years. And the long-term vision is that we want to make a growth book of INR 10,000 crore to INR 20,000 crore.
We do not believe on assessment. Because you have less documentation, because you are definitely targeting to those particular segments. So, we have an understanding of assessment of profile. For example, if there is a customer who is into Kirana business, right? So, we have made our own metrics and parameters to assess that particular profile.
To check next time
What management committed to on this call, or the dates they gave.
- Disbursement progress toward ₹600 cr FY27 target.
- AUM trajectory toward ₹1,300-1,500 cr FY27 target.
- Cost of borrowing moving toward 10.70% target over 1-2 years.
- Equity raise decision (Q4 FY27 or Q1-Q2 FY28) once leverage approaches 5-6x.
- Branch openings in Tamil Nadu and Telangana (10-15 new branches by year-end FY27).
- ROE progression toward 12-13% target.
Transcript
We have not transcribed this call's recording. Read the company's transcript (PDF).
The stock after the call
| After the call | Close | Stock | Nifty 50 |
|---|---|---|---|
| Next session Tue 12 May 2026 | ₹294.15 | −8.08% | −1.83% |
| 5 sessions Mon 18 May 2026 | ₹283.05 | −11.55% | −0.70% |
| 20 sessions Tue 9 Jun 2026 | ₹282.85 | −11.61% | −2.41% |
From the close of Mon 11 May 2026, ₹320.00: the close before the call day (the call's time is not on file). Adjusted daily closes; the move includes everything else that happened in those sessions.